BERLIN (Reuters) -German government officials and UniCredit bankers have held talks after the Italian lender bought a 9% stake in Commerzbank, a German government source said on Friday.

The talks, reported for the first time, is a significant development in the possible acquisition of one of Germany’s largest banks by a foreign institution.

UniCredit declined to comment.

Earlier this week, UniCredit CEO Andrea Orcel said that he would “engage with all the stakeholders and see if the basis for a combination is there”, flagging his interest in buying more of the government stake in the German lender should it be up for sale.

The German source said it was up to the banks to decide what they want and that the German government wasn’t in principle against a tie-up, but acknowledged the bank’s opposition.

“We must take Commerzbank’s wishes into consideration. There is obviously a strong rejection by the workforce,” the person said.

(Additional reporting by Valentina Za; Writing by Tom Sims; editing by John O’Donnell)